State should close per-diem loophole

February 16, 2014

Most businesses reimburse employees for expenses they incur while performing their duties. Most companies require that their workers submit expense receipts to justify the reimbursements.

But Pennsylvania taxpayers, who reimburse their lawmakers for the expenses they incur in the process of representing them, receive no documentation that all of the reimbursements are justified.

Instead, a system is in place where lawmakers who live more than 50 miles from the state Capitol receive per-diem payments for the days they're in Harrisburg.

Lawmakers can collect between $50 and $163 per day. The payments are based on a rate determined by the U.S. Internal Revenue Service for mileage and travel.

Meanwhile, per-diem payments are not taxable, even if a lawmaker doesn't have receipts to prove all of the money received actually was used in doing the taxpayers' work.

Although most taxpayers might not object to the per-diem system that's in place, there's a loophole within the system that is an affront to all those who help finance the state's business. It is the rule that excludes second homes.

It's a loophole that should be closed.

Last Sunday's Mirror included an article about a former state representative from Lackawanna County who is seeking to profit big-time on a house bought with per-diem payments.

James Wansacz, a Democrat who represented the 114th House District from 2000 to 2010, received per diems despite having bought a house in Harrisburg from which he could quickly commute to the Capitol.

The 114th District is near Scranton, which is about 130 miles from Harrisburg.

Therefore, he was receiving the standard per diem for which he was eligible based on his district's distance from the Capitol despite not actually incurring the travel, meal and other expenses that he normally would have had.

"Using per diems to pay mortgages is no different than being reimbursed for hotel rooms or apartments," he told an eastern Pennsylvania newpaper in 2010.

In one sense that's true; in another, it's not.

Wansacz is trying to sell the house for $124,900, which, if he gets his price, will mean a $52,900 profit, according to a Harrisburg area CBS News affiliate. The station's report said Wansacz collected $162,904 in per diems while in office.

Wansacz hasn't offered to share his impending profit with the taxpayers' coffers.

To be fair, Wansacz isn't the first lawmaker to take advantage of the loophole regarding second homes. Because no law prohibits the practice, none of those lawmakers were guilty of doing anything illegal.

But if a lawmaker makes the choice of buying a second home close to the Capitol for convenience's sake, that should be a private decision that should not be rewarded with what amounts to a special financial privilege.

Public service is built on the premise of serving others, not oneself.

Taxpayers tired of being victimized by people in whom they have placed their trust can be excused for advocating that lawmakers turn in expense receipts, like most people's jobs require.